UK Chancellor George Osborne has opened the bidding process for phase one of the High Speed Two (HS2) rail project from London and Birmingham, during his visit to China.

He has invited Chinese firms to bid for seven contracts worth £11.8bn to build the line, including the surface route and tunnels. The seven contracts are split over northern, central and southern areas along the phase one route.

Subject to ministerial decisions later in the year, there will also be an option for additional contracts covering the route north of Birmingham.

The announcement was made at an event in Chengdu, China, where the chancellor urged China’s investors to participate in the HS2 and other major UK infrastructure projects.

"It’s crucial that businesses and communities from across the UK feel the full benefit of forging closer economic links with China."

The HS2 project is part of the government’s plan to rebalance the UK economy and build a Northern Powerhouse by providing high-speed rail services from London to the Midlands and the North.

Osborne said: "This government is committed to rebalancing our economy and building a Northern Powerhouse, and improving transport links and launching HS2 is key to supporting long-term economic growth across the North and Midlands.

"That’s why I’m here in China today opening the bidding process for construction contracts worth £11.8bn, which will propel HS2 forward.

"We are truly entering a golden era of cooperation between our two countries, and it’s crucial that businesses and communities from across the UK feel the full benefit of forging closer economic links with China."

Construction of the first phase of the proposed high-speed rail link is scheduled to start in 2017 between London and Birmingham, with proposed extensions to Manchester and Leeds under the second phase.

As part of the project, intermediate stations are planned at the East Midlands and South Yorkshire.

The plan includes a railway line between London and the West Midlands carrying 400m-long trains at speeds of up to 400km/h with about 1,100 seats a train.

Following completion, the first phase will reduce the travel time between London and Birmingham from 1h 21min, to 49min.

Work is underway on developing plans to transform East-West rail links.

UK Transport Secretary Patrick McLoughlin said: "HS2 provides an excellent opportunity for businesses across the UK with 25,000 jobs created during construction and 3,000 when up and running.

"The start of the procurement process for these significant contracts is a major step towards construction on HS2 getting underway in two years’ time and a massive opportunity to help rebalance our economy long before the trains start running in 2026."

Under the HS2 project, the winning bidders will be responsible to build 230km of bridges, tunnels and earthworks and create thousands of jobs across the construction industry.

The government is currently organising an ‘HS2 partnering day’ to give Chinese companies an opportunity to meet UK firms and establish potential partnerships to join up on bids.

Osborne is also inviting Chinese participation in the HS2 skills college, which is scheduled to open in 2017.